Long Term insurance can simply be defined as an insurance policy where a life is insured. Short Term insurance insures any other item other than a life.
Intermediaries increase the positive effects of insurance. Distribution of insurance is handled in a number of ways and the most common is the use of intermediaries.
Utilising intermediaries enables insurance companies to have and sustain a personal relationship with their clients.
Intermediaries also have the ability to recognise the needs of clients and are able to provide the most suitable insurance products.
If selling long-term insurance, the intermediary is entitled to receive 3.25% of the premium paid by the client and up to 20% for short-term insurance. This needs to be disclosed to the client and remuneration cannot be received twice for the same activity.
The intermediary builds the relationship with the clients and also sells the insurance products. The Underwriting Managing Agency maintains the relationship which includes all queries and amendments regarding a policy.
These examinations deal with regulatory framework and focus on applicable legislation. The examinations are part of the competency requirements.
All Representatives, including those employed or mandated by an FSP, who render a financial service to a client are required to write the RE5 examination. The RE1 examination is for the Key Individual who is responsible for managing and overseeing a business relating to the financial services for the FSP.